Budget confirms digital economy, small business priorities

ACS encourages more funding to address ICT skills gap; more needs to be done for small business…

The ACS – the professional association for Australia’s ICT sector – has welcomed the Federal Government’s commitment to the digital economy as outlined in its 2017-18 Budget. At the same time, Reckon CEO Clive Rabie has said more needs to be done to stimulate small business growth and development.

In a statement, ACS President, Anthony Wong, said the 2017-18 Federal Budget has delivered good news for expediting Australia’s transition to a digital and knowledge economy.

“We would see three key pillars to achieving an economy higher up the value chain and one which affords higher paying jobs; these being a strong banking and finance sector, a strong cyber security capability that delivers trust, and developing high-level STEM skills in the education system,” said Wong.

The economic contribution of the internet and digital-enabled economy is forecast to increase to $139 billion by 2020, representing 7.3% of overall GDP in Australia, with some estimating the potential of currently available digital technology to contribute between A$140 billion and A$250 billion to Australia’s GDP by 2025.

However, while generally receptive to the Budget, Reckon CEO Clive Rabie said that while things are moving in the right direction, bolder moves are required.

“Small businesses are and will continue to be the engine room of the Australian economy, so it is vital that we not only sustain growth but spur further investments in this space. The recent moves to reduce the company tax rate for small businesses to 27.5 per cent is positive, however there is more work to do when comparable nations like the UK have a rate of 19 per cent, and the US is looking to move to 15 per cent.”

Rabie said Australia’s high company tax rate and State and Territory payroll tax rates are evidently massive inhibitors to small business growth. “Any tax relief that can be delivered to small businesses is welcome, as it means they can spend more on productivity-enhancing technology and machinery, and create more jobs which drives economic activity.”

However, Rabie said there are already instances where Australian business owners have decided to set up shop overseas. “It is only a matter of time before the exorbitant costs of running a business here drive more of our own away. Further reforms are necessary to promote small business growth and ensure we remain competitive on the global stage.”

Continuing, Wong said the ACS is pleased to see the investments in the Cyber Security Advisory Office, backing of Australia’s fintech sector, and the commitment to improving student outcomes.

The Government has committed to investing $10.7 million over four years to the Digital Transformation Agency to establish the Cyber Security Advisory Office (CSAO) intended to strengthen governance across government projects and cyber security assurance.

Wong said the ACS is supportive of the Government’s introduction of needs-based funding for Australian schools, as outlined in the Quality Schools reforms package, which includes $242.3 billion in recurrent funding to schools over the next decade. “We also welcome the new [David] Gonski-led ‘Review to Achieve Educational Excellence in Australian Schools’ to provide advice on how this funding should be used to improve student achievement and performance.”

However, he said that at a time when the performance of Australian students in science and maths is declining, the ACS supports a stronger focus on building digital skills and digital literacy in Australian classrooms. “This must be a critical economic and policy priority, especially when STEM is associated with 75 per cent of the fastest growing occupations, innovations and wage premiums,” said Wong.